An escrow is an agreement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties.
​
At Funding Societies, we have engaged Malaysian Trustees Berhad, a subsidiary of RHB, to hold investors' funds. This is to mitigate concerns over mismanagement of funds, ensuring that your funds are appropriately received and handled. It also ensures that the issuers and investors are Know-Your-Customer (KYC) compliant, which is a compliance process to verify the identity of our investors and issuers, and the monetary transactions are in compliance with the Anti-Money Laundering Act.
​
Without an escrow account, investors’ funds will be transferred into the business account of the platform instead. This brings into question if whether the funds are handled properly as there is no guarantee that your funds actually go to the SMEs. Similarly, SME issuers will want to ensure that their repayments go to investors like you, instead of being held by the platform itself.
​